Aspen Asset Management AG Explains How M&A Financing Keeps the Leveraged Finance Market Thriving

Swiss-based Aspen Asset Management AG has highlighted how the financial market for Mergers & Acquisitions is currently experiencing heightened growth

Aspen Asset Management AG explains that a resurgence in European corporate transactions has fueled a double-digit acceleration in leveraged finance earmarked for M&A (excluding buyouts), with a healthy pipeline indicating a bustling 2022. 

In the summer of 2021, many firms put their "house on the market," so to speak — in some cases, having delayed for years. COVID-19 had already put the kibosh on many M&A plans in 2020 so, when businesses that had been debating whether or not to sell saw their rivals being more bullish and garnering attractive prices, they leaped in with both feet.

"Mega-transactions played a major role in the surge of activity that piqued our investors' appetite for high-end European corporate M&A. At the same time, following 18 months of the pandemic, lenders were better positioned to assess the resilience of businesses and were needing a home. They also grew confidence when identifying the right credits and put their capital to work," explained Christian Lawrence, Aspen Asset Management AG's longstanding Head of Global Equities.

This surge in deals undoubtedly had an opportunistic element to it. Companies that had performed surprisingly well during the epidemic, or industries overwhelmed with new business, became attractive targets. As more individuals purchased online and delivery became a necessity, logistics and storage companies found themselves on the front lines. From vaccines to testing facilities, pharmaceutical firms were thrust into the limelight.

These factors — a backlog of deal-making paired with a pent-up flow of financing, appealing targets in a wide range of industries, a greater understanding of the impact of the ongoing pandemic on these firms, and attractive prices — the situation was perfect for a flurry in deals.

According to statistics gathered by Aspen Asset Management AG, Western European M&A deal value was already higher at the end of Q3 2021 than the annual total of any year since the global economic crisis. By the end of 2021, it hit US$1.3 trillion — greatly exceeding the US$768.3 billion in deals achieved in 2020 and approaching the all-time high-water mark of US$1.4 billion set during the market's peak in 2007.

"After a burst of activity in 2021, we have forecast that M&A markets will remain healthy for the first half of the year at least, providing our investors with a robust pipeline of opportunities well into 2022," Christian Lawrence added.

This flurry in deal activity has spurred year-on-year growth in both leveraged loans and high-yield bond issuance for M&A, as corporates took advantage of a variety of options to fund the spike in strategic activity.

About Aspen Asset Management AG

Over the last four decades, Aspen Asset Management AG has delivered first-class investment services that have helped shape today's finance industry. We provide a commitment to excellence and a proven history of success that allows us to understand the intricacies of wealth and the often complex lives our clients lead. 

Registration & Regulatory Information

Aspen Asset Management AG is registered in Switzerland under Registration No.: CHE-101.337.359. Registered office: Zug, Switzerland. Aspen Asset Management AG operates under the regulatory supervision of ARIF Genf (Member No.: 3227), a self-regulating body approved by the Swiss Financial Market Supervisory Authority (FINMA) for the supervision of the financial intermediaries referred to in article 2 paragraph 3 of the Swiss Federal Law on combating money laundering and terrorism financing in the financial sector (AMLA). ARIF is also recognized by FINMA as a professional organization for laying down rules of conduct relating to the practice of the profession of independent asset manager within the meaning of the Swiss Federal Act on collective investment schemes.

Risk Warning

Past results are not indicative of future results and may not be reproduced. The value of shares can go up as well as down, and no assurance can be made. The value of shares might fluctuate due to changes in currency rates. As a result, a profit on an investment is not guaranteed, and an investor may lose money. Past results are presented before any deductions for taxes.

Media Contact
Stephen Moore, Head of Operations
+41 44 551 89 00 
Baarerstrasse 43, CH-6300, Zug, Switzerland

Source: Aspen Asset Management AG

About Aspen Asset Management AG

Over the last four decades, Aspen Asset Management AG has helped to shape the industry. We have a commitment to excellence and a proven history of success, which allows us to understand the intricacies of wealth.

Aspen Asset Management AG
Baarerstrasse 43
Zug, Zug